Immunomedics: Contrarian Oncology Pick

Summary

• Immunomedics stock has risen approximately 8% in the last week since we picked it up in our premium research service. The stock is a good contrarian pick.
• Immunomedics' sacituzumab has the potential to change the treatment paradigm of refractory, heavily-pretreated, metastatic triple-negative breast cancer, a disease with great unmet need.
• Sacituzumab's CRL was related to manufacturing issues which have been addressed. BLA resubmission is planned in Q4 this year.
• Additional trials have the potential to further expand sacituzumab's target addressable market to 9+ clinical indications, including potential breakthrough designation in advanced urothelial cancer.
• Rating Buy, price target = $30.
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Immunomedics (IMMU) stock has risen approximately 8% in the last week since we picked it up in my premium research service. The stock is a good contrarian pick and shares have more upside ahead.

Immunomedics' sacituzumab has the potential to change the treatment paradigm of refractory, heavily-pretreated, metastatic triple-negative breast cancer, a disease with great unmet need

Immunomedics' proprietary antibody-drug conjugate, sacituzumab govitecan (IMMU-132, which combines a humanized monoclonal antibody, which targets the human trophoblast cell-surface antigen 2 (Trop-2), with SN-38, conjugated to the antibody by a cleavable linker; patent protection till 2033) has shown excellent response rate of 33% with median duration of response = 7.7 months, increase in progression-free survival, PFS of 5.5 months (higher than standard of care, SOC), and increase in overall survival of 11 months in advanced/metastatic, heavily-pretreated triple-negative breast cancer (mTNBC), a disease with poor prognosis and high unmet need, resulting on FDA Breakthrough therapy designation (its efficacy is significantly higher compared to SOC therapies, with acceptable safety profile) (target market=about 8,000 patients in the U.S. and 14,000 patients in the EU and Japan).

Sacituzumab's mTNBC data (Source)

Sacituzumab's CRL was related to manufacturing issues which have been addressed

FDA issued a complete response letter, CRL, to sacituzumab's BLA (under accelerated pathway) as a third line or higher mTNBC indication in January this year, citing manufacturing related issues (primarily at the New Jersey-based facility where the antibody is manufactured). According to the news release, "The issues related to approvability in the CRL were exclusively focused on Chemistry, Manufacturing and Control matters and no new clinical or preclinical data need to be generated." Combined with the CEO's departure in February, the stock has been down from its peak as a result.

The management has addressed the manufacturing issues raised by the FDA (including a recent deal

Analyst’s Disclosure:I am/we are long IMMU, ZGNX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: This article represents my own opinion and is not a substitute for professional investment advice. It does not represent a solicitation to buy or sell any security. Investors should do their own research and consult their financial adviser before making any investment. Investing in equities, especially biotech stocks has the risk of significant losses and may not be suitable for all investors. While the sources of information and data in this article have been checked, their accuracy cannot be completely guaranteed.